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Property Market In Ho Chi Minh City Has Not Developed Signs

The property market in Ho Chi Minh City is showing signs of the slowdown, there are still signs of risk factors such as the lack of balance of housing products, the phase difference supply – demand.

According to a recent report of HCM City Real Estate Association (HoREA), the Property market in the first ten months of 2017 is still in the recovery and growth cycle. The development is relatively stable but in a state of slowdown.

HoREA said that the real estate market still has signs of risk factors such as the imbalance of housing products, supply-demand phase difference. The supply of social houses, small and medium commercial houses, 1-2 bedrooms, affordable prices. In the segment of the high-end real estate, luxury vacation resorts have signs of oversupply.

In addition, credit capital of banks and social capital (mainly of homebuyers) pour into the real estate market is very large, tends to deviate into some large enterprises and into the segment of the high-end real estate, Tourist Resort. At the same time, the increase in many secondary business investors.

Property market in Ho Chi Minh City has not developed signs
The real estate market still has many “bottlenecks”.

Le Hoang Chau, Chairman of HoREA, said that the real estate market in Ho Chi Minh City has not developed transparent, healthy, stable and sustainable due to 5 congestion. The first is that the “congestion” of land use fees is a burden, which is unknown, creating a “ask-give” mechanism, which in the end the buyer must suffer.

Second, the “bottleneck” of land clearance leads to many unfinished compensation projects, which have been unable to be implemented, have buried their capital for a long time.

Thirdly, the “congestion” in the transfer of real estate projects due to the Land Law and Real Estate Business Law requires the investor to have a certificate of land use right. While there are mortgage projects as collateral for bank bad debts, but no certificate of land use rights.

As a result, the transfer of new investors has not been facilitated, the restart of projects that have been suspended has not been facilitated, and the transfer of projects has not been smooth. , this is a normal business activity of the business.

The fourth “obstruction” is inappropriate credit policy, not create medium- and long-term capital for real estate market, while the nature of operation of this market is medium-term, long-term. So far only one real estate investment fund in the country is TCREIT Fund of Techcombank established in July 2016.

Real estate lending rates remain high (around 10% per annum); There is no credit support policy for first home buyers (affordable housing); The State Bank has not proposed the housing credit package under Resolution 46/2017 / NQ-CP of the Government; Up to now, no preferential credit has been provided to 4 large banks (Vietcombank, Vietinbank, Agribank, BIDV) to implement social housing policy; Buyers of social housing have not yet accessed to preferential loans at interest rates of 4.8% per year.

Property market in Ho Chi Minh City has not developed signs
The supply of social housing, small and medium commercial housing, 1-2 bedrooms

Finally, the “bottleneck” of many administrative procedures, prolonged, hidden negative, harassment in the process of approval, implementation of investment projects using the land.

For example, the appraisal of basic designs and technical designs of grade 1 works (from over 20 floors) must be approved by the Construction Management Department (the Ministry of Construction) to the Department of Construction to apply for a construction permit. The construction permit process would have required design evaluation, but it was split into two very cumbersome procedures.

Moreover, it is necessary and reasonable to assign the Department of Construction the authority to appraise the basic design and technical design of the first level works, shorten the time for carrying out administrative procedures and assist the project implementation and contribute to reducing the cost of housing.

Recently, the Government issued Decree No. 42/2017 / ND-CP dated April 5, 2017, which stipulated that the design of high-rise buildings up to 24 storeys with a height of fewer than 75 m this modification is too little). As a result, all works on the 24-storey (75m) will also have to go through the Department of Construction Management under the Ministry of Construction appraisal.

While the capacity of cadres in the construction sector of centrally-run cities can be as high as 100 meters, and, of course, there will be a need for support from the province of the Ministry of Construction to appraise the high-rise buildings for the case less than 75m, due to the capacity of officials of the Department of Construction provinces are uneven.

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Property Market In Ho Chi Minh City Has Not Developed Signs
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